Zendoo: a zk-SNARK Verifiable Cross-Chain Transfer Protocol Enabling Decoupled and Decentralized Sidechains

Abstract: Sidechains are an appealing innovation devised to enable blockchain scalability and extensibility. The basic idea is simple yet powerful: construct a parallel chain -- sidechain -- with desired features, and provide a way to transfer coins between the mainchain and the sidechain. In this paper, we introduce Zendoo, a construction for Bitcoin-like blockchain systems that allows the creation and communication with sidechains of different types without knowing their internal structure. We consider a parent-child relationship between the mainchain and sidechains, where sidechain nodes directly observe the mainchain while mainchain nodes only observe cryptographically authenticated certificates from sidechain maintainers. We use zk-SNARKs to construct a universal verifiable transfer mechanism that is used by sidechains. Moreover, we propose a specific sidechain construction, named Latus, that can be built on top of this infrastructure, and realizes a decentralized verifiable blockchain system for payments. We leverage the use of recursive composition of zk-SNARKs to generate succinct proofs of sidechain state progression that are used to generate certificates' validity proofs. This allows the mainchain to efficiently verify all operations performed in the sidechain without knowing any details about those operations.